Laboratory Corp Of America Holdings

LH

Services-Medical Laboratories

Mkt Cap

$16.51B

PE

38.11

Debt

$3.048B

Cash

$99.3M

EV

$19.46B

FCF

$683.2M

Market Cap

$16.51B

P/E Ratio

38.11

Debt

$3.048B

Cash

$99.3M

EV

$19.46B

FCF

$683.2M

Charts data: {"Earnings":[{"time":"2014-12-30","value":511200000},{"time":"2015-12-30","value":436900000},{"time":"2016-12-30","value":732100000},{"time":"2017-12-30","value":1268200000},{"time":"2018-12-30","value":883700000},{"time":"2019-12-30","value":823800000},{"time":"2020-12-30","value":1556100000},{"time":"2021-12-30","value":2377300000},{"time":"2022-12-30","value":1279100000},{"time":"2023-12-30","value":418000000}],"Sales":[{"time":"2014-12-30","value":6011600000},{"time":"2015-12-30","value":8680100000},{"time":"2016-12-30","value":9641800000},{"time":"2017-12-30","value":10441400000},{"time":"2018-12-30","value":11333400000},{"time":"2019-12-30","value":11554800000},{"time":"2020-12-30","value":13978500000},{"time":"2021-12-30","value":16120900000},{"time":"2022-12-30","value":14876800000},{"time":"2023-12-30","value":12161600000}],"Net Margins":[{"time":"2014-12-30","value":0.08503559784416795},{"time":"2015-12-30","value":0.05033352150320849},{"time":"2016-12-30","value":0.07592980563795142},{"time":"2017-12-30","value":0.12145880820579616},{"time":"2018-12-30","value":0.07797307074664267},{"time":"2019-12-30","value":0.07129504621456018},{"time":"2020-12-30","value":0.11132095718424724},{"time":"2021-12-30","value":0.14746695283762074},{"time":"2022-12-30","value":0.08597951172295117},{"time":"2023-12-30","value":0.034370477568740954}],"Assets":[{"time":"2014-12-30","value":7301800000},{"time":"2015-12-30","value":14221700000},{"time":"2016-12-30","value":14247000000},{"time":"2017-12-30","value":16568000000},{"time":"2018-12-30","value":16185300000},{"time":"2019-12-30","value":18046400000},{"time":"2020-12-30","value":20071700000},{"time":"2021-12-30","value":20385400000},{"time":"2022-12-30","value":20155100000},{"time":"2023-12-30","value":16725100000}],"Stockholders Equity":[{"time":"2014-12-30","value":2820500000},{"time":"2015-12-30","value":4944400000},{"time":"2016-12-30","value":5505800000},{"time":"2017-12-30","value":6830000000},{"time":"2018-12-30","value":6971400000},{"time":"2019-12-30","value":7567000000},{"time":"2020-12-30","value":9359700000},{"time":"2021-12-30","value":10273400000},{"time":"2022-12-30","value":10096600000},{"time":"2023-12-30","value":7875000000}],"ROE":[{"time":"2014-12-30","value":0.18124446020209184},{"time":"2015-12-30","value":0.08836259202329909},{"time":"2016-12-30","value":0.13296886919248793},{"time":"2017-12-30","value":0.18568081991215227},{"time":"2018-12-30","value":0.12676076541297301},{"time":"2019-12-30","value":0.10886745077309369},{"time":"2020-12-30","value":0.16625532869643259},{"time":"2021-12-30","value":0.23140343021784415},{"time":"2022-12-30","value":0.12668621119980983},{"time":"2023-12-30","value":0.05307936507936508}],"ROA":[{"time":"2014-12-30","value":0.12468158536251335},{"time":"2015-12-30","value":0.0705189956193704},{"time":"2016-12-30","value":0.09211763880115112},{"time":"2017-12-30","value":0.0823394495412844},{"time":"2018-12-30","value":0.08190765694797131},{"time":"2019-12-30","value":0.0737099920205692},{"time":"2020-12-30","value":0.12183322787805717},{"time":"2021-12-30","value":0.1598938455953771},{"time":"2022-12-30","value":0.08801246334674598},{"time":"2023-12-30","value":0.043383896060412194}]}

Laboratory Corporation of America Holdings operates as a life sciences company that provides vital information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. It operates in two segments, Labcorp Diagnostics and Labcorp Drug Development. The company offers various tests, such as blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, PAP tests, hemoglobin A1C and vitamin D, prostate-specific antigens, tests for sexually transmitted diseases, hepatitis C tests, microbiology cultures and procedures, and alcohol and other substance-abuse tests. It also provides specialty testing services comprising gene-based and esoteric testing; advanced tests target specific diseases, including anatomic pathology/oncology, cardiovascular disease, coagulation, diagnostic genetics, endocrinology, infectious disease, women's health, pharmacogenetics, and parentage and donor testing; occupational testing services, medical drug monitoring services, chronic disease programs, and kidney stone prevention tests; and health and wellness services to employers and managed care organizations (MCOs), including health fairs, on-site and at-home testing, vaccinations, and health screenings. In addition, the company offers online and mobile applications to enable patients to check test results; and online applications for MCOs and accountable care organizations; and end-to-end drug development, medical device, and companion diagnostic development solutions from early-stage research to clinical development and commercial market access. It serves MCOs, pharmaceutical, biotechnology, medical device and diagnostics companies, governmental agencies, physicians and other healthcare providers, hospitals and health systems, employers, patients and consumers, contract research organizations, and independent clinical laboratories. The company was incorporated in 1994 and is headquartered in Burlington, North Carolina.

Sector

10-Q
9/30/23
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10-K
12/31/22
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3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Laboratory Corp Of America Holdings

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$683.2M	$743.1M	$805.2M	$869.1M	$934.4M	$1.001B	$1.067B	$1.134B	$1.2B	$1.266B	$1.329B	$13.29B
DCF		$646.2M	$608.8M	$571.4M	$534.2M	$497.5M	$461.5M	$426.4M	$392.4M	$359.7M	$328.5M	$3.285B
Value	$8.111B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 8.2%

Earnings Stability 12%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	5%	7.6%	12%	7.8%	7.1%	11%	15%	8.6%	3.4%	3.7%
ROA	7.1%	9.2%	8.2%	8.2%	7.4%	12%	16%	8.8%	4.3%	4.3%
ROE	8.8%	13%	19%	13%	11%	17%	23%	13%	5.3%	5.4%

What is the average Net Margin?

The average Net Margin over the past 5 years is +8.81%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.39%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +9.48%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.32%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +13.55%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.71%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	9.49	7.19	6.31	6.61	6.34	3.31	2.05	3.62	5.78	4.46
Debt Equity	1.39	1.17	1.06	0.88	0.87	0.62	0.53	0.53	0.64	0.38
MIN
Graham Stability	-	-	100%	100%	86%	100%	100%	81%	24%	24%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 4.46.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.39.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.24.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	3.4%	1.4%	-4.5%	-18%	-4.7%
Net Income	-7.7%	-14%	-35%	-67%	-7.9%
Stockholders Equity	5.2%	2.5%	-5.6%	-22%	-7.3%
FCF	-0.37%	-1.1%	-21%	-41%	-6.3%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +1.42%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -4.67%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -13.91%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -7.9%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +2.47%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -7.26%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -1.14%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -6.26%.